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In traditional liquid cooled internal combustion engine systems, the coolant temperature is controlled by a thermostat which governs the coolant flow rate to the radiator. The thermostat is effectively a directional control valve in which the spool displacement is used to direct flow to the radiator. The coolant temperature is primarily a function of four parameters, namely radiator and thermostat characteristics, coolant flow rate and ambient temperature. By employing closed-loop feedback, the coolant temperature can be controlled according to environmental conditions. To achieve this goal the overall system must be correctly designed. That is the issue discussed in this paper. The increasing use of simulation for both circuit and component analysis in the automtive industry has come about due to the requirement for acceptable transient as well as steady state system performance.